Move Logistics will pay about $15.2 million for bulk liquid transporter Fluidex Transport, as a 'bolt-on' to the firm's contract logistics business.
Move, dual listed on the New Zealand and Australian stock exchanges, has agreed to an upfront payment of $7m on the expected settlement date of Oct 31, with the cash or shares balance of $8.2m payable at the end of July 2024.
Fluidex has bases in Auckland, Mount Maunganui, Blenheim, and Christchurch, and has been in business for 60 years. It employs 35 staff, has 50 trucks, 90 associated trailer combinations and a fleet of ISO tanks, primarily used for shipping hazardous liquid cargo.
The firm reportedly has 'recurring' revenue of $11m and has been owned by Tony Galbraith since 1995.
$3.1m loss
The acquisition comes as Move reports a loss of $3.1m for the year to June 2022, despite a 5% increase in revenues to $349.1m, from $332.3m for the year before.
Move executive director Chris Dunphy said the results were in line with the firm's guidance provided in May, although trading volumes in both freight and fuel were "below expectations", reflecting the impact of covid on fuel deliveries for the year.
Restructuring costs had clipped $1.8m from earnings, with net capital expenditure at $1.5m for the year.
Dunphy said the firm's asset replacement programme – part of its strategic 'reset' – was put on hold after delays in the delivery of new trucks.
That also resulted in increased maintenance costs of the existing fleet, with operating costs – fuel, parts and labour – having all increased in line with inflation.
However, Dunphy said he expected results to improve this financial period because the freight reset continues, and contract logistics "builds on the work done in the last year".
Move Oceans division
Those initiatives include the company's move into coastal and trans-Tasman shipping under its new Move Oceans division. And the Fluidex purchase would support the group's expansion into the oil, wine and dairy sectors.
Earlier this month, Move announced it had bought a general cargo ship, the Malta-registered Atlas Wind, to operate a trans-Tasman service.
In May, Move was awarded part of a $30m government package to pilot its coastal shipping initiative.
The Atlas Wind would cover import/exports out of the smaller ports of Nelson, Timaru, New Plymouth and Bluff into Tasmania and other Australian ports.
